It’s a legal wrangle over legal practice. The Supreme Court interim order last week, on a petition filed by the Bar Council of India, on the contentious subject of allowing foreign law firms into the country, has rung in the final round of a battle that has raged for the past 18 years. The apex court adjudged that ‘practice of law’ involved both litigation and ‘desk work’ and instructed the Reserve Bank of India not to issue any clearance to any foreign law firm, laying the ground rules for a hearing later this year.
Spearheading the resistance to foreign law firms, the Society of Indian Law Firms (SILF) is scathing in its opinion. “Unlike our foreign counterparts, we are not into the business of law. We (sic) are a profession and our profession is not for sale,” reads one of its statements on the subject. SILF alleges that the government is under intense pressure from the US and the UK to open up the legal services sector. As elsewhere in the world, India does not allow foreigners to practice law.
But whether foreign lawyers can set up a practice on foreign and transactional law falls in a grey area, allowing foreign firms to operate by taking advantage of the ambiguity in the law with the government’s tacit approval. With an increasing number of Indian companies buying up land, mines and manufacturing units abroad, the demand for expert advice on foreign law and such acquisitions has gone up. The number of foreign law firms operating in the country, estimates SILF president Lalit Bhasin, has gone up from just three in 1994 to over 50 in 2012.
SILF, curiously, is not opposed to foreign lawyers flying in and out “on business”, but is against their setting up shop here. The reason is not far to seek. Foreign law firms now operate through Indian firms and end up paying substantial fees on the business secured. They have also tried out ‘best friend’ arrangements with Indian firms to share cost, training and infrastructure. Some foreign firms have also taken to recruiting Indian law graduates, mostly from the National Law Schools, at fancy salaries and having them trained abroad—all to circumvent the ban on foreign firms and lawyers.
The opposition also stems from the distinct possibility that foreign law firms, once allowed, might end up buying some of the Indian ones. Also, publisher-editor of the portal legallyindia.com, Kian Ganz, points out, “Entry of foreign firms might drive up top salaries in the market and prompt domestic players to increase their fees.” On the other hand, younger lawyers would also hope for better opportunities, and service conditions, and can be poached from Indian firms.
The issue has its genesis in 1994, when three firms, two based in New York and one in London, were allowed by the RBI to set up offices in India. Both the RBI and the Centre argued then that foreign firms were not interested in litigation but ‘desk work’, which, they believed, did not amount to legal practice. The Bombay High Court took almost 15 years to rule against the government in December 2009. But there was still no clarity on whether foreign lawyers could advise Indian clients here on foreign law, which the SC is now expected to adjudicate.
But the system was sought to be manipulated, points out Anand Grover of Lawyers Collective, which had first challenged the entry of foreign firms in 1995. Referring to a controversial ruling of the Madras High Court delivered earlier this year, Grover asks how two different high courts could lay down contradictory rules on the same subject.
The eagerness of foreign law firms to get a foothold in India is evident. London-based A&O commissioned an “independent” survey this year to claim that Indian clients, lawyers, even law firms are overwhelmingly in favour of opening up the legal sector. When the British Prime Minister David Cameron visited India, his entourage included a high-profile British lawyer, Stewart Popham.
Ganz points out that the revenue of UK law firms are growing faster in Asia than in the West, which explains their eagerness to set up offices in India.
But Grover is clear that till the West allows Indian lawyers similar rights in their own countries, there is no reason to favour them here. “Nowhere in the world do they allow foreign lawyers to practise unless they are enrolled with the Bar and have cleared a tough examination,” he points out. Bhasin agrees. “There is even no point in the UK allowing Indian firms permission to open offices, unless work permits are also given,” he says. Reciprocity is a concern, adds Bar Council of India chairman Manan Kumar Mishra. “We recognise law degrees conferred by 25 foreign law schools in India; but the West does not recognise ours.”
Indian firms also complain that while foreign law firms are allowed to advertise, Indian law does not permit any kind of advertising or soliciting by lawyers. The websites of law firms, contends Bhasin, contain the barest minimum information, and that too thanks to a special directive of the apex court.
The Bar Council of India is also opposing moves to allow Harvard, Yale and Stanford law schools to set up campus in India, which it feels would lead to a “backdoor entry” by foreign lawyers.
Experts, however, feel that second generation reforms in legal education, preparation for a level playing field and putting proper guidelines in place would sort out the matter. “It will be far less painful then, when the invasion does take place,” says a former chairman of the Bar Council of India.
The argument in favour of proscribing foreign lawyers from practising in India seems completely facile (To Readjust The Bar, Jul 23). If foreigners in other professions are allowed to work in India, why not extend it to law?
Bichu Muttathara, Pune
Allowing foreign legal firms into India would make the profession competitive. People would be able to shop around for quality service, adjournments will be minimised and our legal education too will get a boost.
Chandru Mani Iyer, Bangalore
There is no case, in law or equity, to keep foreign legal - or any other profession, for that matter - firms out of India. Bangalore versus Buffalo is a tired, stale cliche that should not resonate at all in a globalised world. Without remittances and export of services, India's current account deficit would more than double.
The argument in favour of proscribing the foreign lawyers from practicing in India does not appear valid for more than one reason. First of all, legal profession is like any other profession. If foreign professionals are allowed to practice in India in other professions, why not in the field of law? Secondly, many of the Indian advocates are allegedly unprofessional in their functioning and openly defy the professional code of ethics and lacking in obligation towards their clients. Even now the professional legal luminaries are not accessible for the common people due to their prohibitively high professional fees. Thirdly, major legal professional and educational reforms are the need of the hour to bring them into line it with the globalized economy. Fourthly, no profession can claim immunity from competition and out-rightly deny level-playing filed to other professional irrespective of their nationality in a global economy. Lastly, the present xenophobic threat perceptions are not convincing enough to deny permission for the foreign firms from practicing in India. In professional work, patriotism is one thing, insulating the profession from any competition and professionalism is another thing.
I think we should allow foreign legal firms in India. Then, the profession becomes competitive. Only real brain would rule the roost. Money making harassments would stop. Adjournments will be minimized. People would get quality legal service. Indian Legal education may get a boost. Healthy competition would bring the cost low. Bad elements in legal profession would silently fold. The flip side happens in any industry. Deep knowledge and the experience would always thrive without fear. Superficial will not survive. However, the fears are unnecessary.
Lawyers today are vultures ready to eat whle the prey is still alive. Our legal eagles ahve learned this from those in the west. Allowing foreign lawyers will make matters worse where the vultures will become cannibals. As it is legal fees are soaring beyond the reach of the common man, with American and UK law firma entering, there would not be any use going to court. The poor man would be left licking dust.
As if the Indian vultures haven't had enough
More circle overhead , for the mangled stuff
Legalese sharpened , justice denied
Mafiosi protected , and innocence tried
In the alleys of darkness , lifetimes are snuffed
People die wailing for justice , in the courtrooms stuffed!
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